Venezuela's state owned Petroleos de Venezuela SA soon will choose international partners to participate in its proposed $2.9 billion offshore liquefied natural gas export project.
Work could begin in 1992 with first cargo of LNG exported in 1997. Ultimately Pdvsa wants to export 700 MMcfd of gas, mostly to U.S. markets, from fields in the Gulf of Paria between northeastern Venezuela and Trinidad.
Juan Chacin, former Pdvsa president, said Pdvsa has lined up firm buyers for Venezuelan LNG in the U.S.
Among prospective partners under consideration are British Petroleum Co. plc, Exxon Corp., Mitsubishi Heavy Industries Ltd., Royal Dutch/Shell Group, Texaco Inc., and Total CFP.
Current Pdvsa Pres. Andres Sosa Pietri recently said three companies had been selected but did not identify them or indicate whether the choice would be further narrowed.
WHAT TO EXPECT
Plans call for Pdvsa subsidiary Lagoven SA to hold 30-40% of the project equity with a combine of international companies owning the remainder. Lagoven partners would be required to bring financing, technology, and access to markets to the deal.
Pdvsa views the project as a prototype for upstream ventures between international companies and Venezuelan state oil concerns, Sosa said.
In order for the project to proceed, Venezuela's Congress first must approve it and may have to change current laws governing the country's oil and gas industry under the Oil Industry Nationalization Law of 1975.
Efforts will be needed to ease the tax burden on prospective partners because Pdvsa now pays as much as an 82% corporate tax rate on its operating income.
PROJECT DETAILS
The LNG export project, called Cristobal Colon, will involve development of dry gas reserves Lagoven discovered in the Gulf of Paria in 1978.
Plans call for Lagoven to drill 55 wells from four to eight platforms. From them, gas will move through a 45 km subsea pipeline to a processing/liquefaction/tanker loading complex on Mapire Bay between the towns of Guiria and Macuro on Paria Peninsula.
Pdvsa breaks out project costs as $1 billion for the platforms, wells, and pipeline, $1.3 billion for the processing/LNG complex and $600 million for three LNG tankers.
With wells producing an average 13 MMcfd, Pdvsa expects the Gulf of Paria fields to produce for 20 years.
Pdvsa believes the project would be economic with oil prices at $20/bbl.
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